The Orlando Condo Blog

Tuscany Preserve in Kissimmee has 12 units priced from $139,900 - $294,900. The gated community has all the usual amenities and 4 golf courses and shopping plaza within 1-2 miles.

The following great incentives apply:

• ADDITIONAL $10,000 - $25,000 CASH BACK ON SELECTED MODEL FOR THE FIRST 3 BUYERS.
• POSITIVE CASH FLOW OF $1,954 - $4,300 PER YEAR WITH 65% FINANCING.
• BUILDER PAYS RENT GUARANTEE OF 8% OF THE PURCHASE PRICE FOR 2 YEARS.
• BUILDER PAYS HOME OWNER’S ASSOCIATION FOR 2 YEARS.
• BUYER WILL GET 1 WEEK PER YEAR FREE ACCOMMODATIONS UNTIL THE RENTAL PERIOD IS OVER.

Call us here at 407-290-3408 for more information or a tour!

Federal banking regulators have just closed California leviathan IndyMac Bank FSB. The Federal Deposit Insurance Corp. has been named as conservator. I think this is the fifth bank to fail this year.

The FDIC said it will transfer insured deposits and “substantially all the assets” of IndyMac Bank, to a newly created successor, IndyMac Federal Bank, which will be operated by the FDIC.

IndyMac Bank, FSB had total assets of $32.01 billion and total deposits of $19.06 billion according to the latest figures, including about $1 billion of potentially uninsured deposits held by approximately 10, 000 depositors. The FDIC will begin contacting customers with uninsured deposits to arrange an appointment with an FDIC claims agent by Monday.

So let the fiscal bitch slapping begin… Round one… Ouch!

I’m pleased to announce that the news relating to mortgages and economics has gotten a lot more in­teresting for everyone this week. Lots of reasons to feel positive about where rates may be headed.

At least in the short-term.

First off, Fed Chairman Ben Bernanke announced earlier this week that the Fed governors were con­sidering extending the time that investment banks would have access to the Term Securities Lending Facility. This means, amongst other things, that these ailing institutions can post their questionably valued mortgage-backed securities as collateral in exchange for loans from America’s central bank. This news prompted a renewed interest from the investment community in mortgage-backed securities and sent mortgage rates roaring down.

Good news from this move: it helps to break up the log-jam in the mortgage financing industry. From a completely selfish perspective, this is a huge plus. It’ll bring more investment, help real estate prices to reach a solid market bottom and lower the interest rates that consumers pay. Yaaaaaay!

Bad news from this move: the doors are remaining open for the Fed to take on a ton of bad invest­ments that have the distinct potential of getting worse. They can only do this for so long before these actions would bring forth higher taxes (because the central bank has gotta get money from somewhere) and would usher in a new era of political intervention and regulation to our financial markets that could strangle America’s international competitiveness right out of the system in the name of stability. Translation for the consumer: qualifying for a loan would get even harder than it is right now. Boooo!

This process is already starting to play out. Fannie Mae and Freddie Mac, two giants in secondary market mortgage financing, saw their stocks nosedive after former Fed President William Poole stated “(Fannie and Freddie) may need to be bailed out from the rising pressure of the greatest housing slump since the Great Depression.” This came on the same day that Treasury Secretary Hank Paulson and Ben Bernanke were testifying to House Financial Services Committee, pushing hard for a regulatory overhaul to “reduce the circumstances that require government intervention”.

Soooooooo…we’re going to bring in a ton more regulators and intervene…less? Continue Reading »

“I’m not buying yet. I’m waiting on the sidelines for the market to hit rock bottom.”

You and the rest of the country.

I’m not saying you’re wrong. But I have two questions for you:

1.) How will you know when rock bottom happens in a complex market where the only perfect vision is hindsight, and the best statistics are at least 3 months old? Real estate isn’t tracked in a real time manner such as publicly traded stocks so it is only weeks or months after a deal has been negotiated and closed that the analysts can accurately gauge the market based on completed transactions. This lag time cleverly disguises the most opportune time to buy at the deepest discount and makes even seasoned investors skittish because the truth is that bottom will only become known after the low watermark has been reached and the leveling off process has already begun. (See this post for a real numbers analysis).

2.) When rock bottom happens, do you think you are the only one who will notice? And if you accept that most everyone else will notices at the same time (including the sellers), don’t you think the law of supply and demand will dictate that prices will immediately rise and you’ll lose your advantage almost overnight? Competitors are likely to learn of the bottom simultaneously, effectively eliminating any buying advantage given the depth of the pent up demand.

If it were really that easy work the market, we’d all be rich. But as many have discovered of late, profiting from real estate is not always easy. Purchasing real estate requires a certain amount of risk tolerance. Some folk prefer stocks, some prefer to stuff their money under the mattress with their porn. At the end of the day, each person has to assess when the time is right for them to personally get back in the house buying market. Those that take the most risks make the most money but also stand to lose the most, whereas those that choose a more conservative route are not likely to make as much money, but also bear less risk. If you play Black Jack are you the kind of guy who sticks at 17 - or do you take the risk and “twist”?

So where is your “personal bottom?” Mine is just below my back.

Some of you may have noticed a new “widget” on the top right hand side of the blog which displays current Orlando listings. Click on it and it will take you directly to our MLS search engine. And if you have those cool GI Joe eagle eyes that move from side to side you might even have noticed an extra row of tabs above our banner - which correspond to the six new pages we’ve just launched, designed to help you locate more of the information you need. They are:

1. Timeshare vs. Condos
   
2. Moving to Orlando? We’re Here to Help
   
3. Baby Boomers
4. International Buyers
5. Agents: How to Earn Referral $$
   
6. You Tube Video News
   

We’ll be tweaking them in the days to come - especially the video section which we have no control over (it’s syndicated from YouTube.com) Anyway, we hope you like ‘em.

According to the latest Orlando Sentinel Story MetroWest’s most luxurious new condo building Veranda Park is having financial troubles.

And who isn’t?

Just another Orlando developer clipped by an anemic economy and housing market which is hurting everyone - except savvy buyers who are beginning to move in and take advantage of great pricing.

In April we posted a blog regarding the liens filed against Veranda Park. Now, Wakovia Bank is proceeding with four separate foreclosure lawsuits against developer Kevin Azzouz and several of his companies for a total of $51 million, according to documents filed recently in Circuit Court in Orlando.

At stake is the beautiful 144-unit condo building off Hiawassee Road called The Residences. If you’ve seen Veranda Park, you’ll know what an incredible piece of work it is. And a boon to MetroWest. They’re expensive but there’s nothing like them anywhere else in Orlando. They’re unique.

“They’re playing incredible hardball with us,” Azzouz said. “The easiest thing for me to do is to put the keys [to the condos] in a box, give it to the bank and walk away, and we’re done. But I don’t want to do that to the community.”

Let’s hope not.

As promised last week, here is news of the latest deals at Reunion Resort in Orlando. Last weekend, Bobby Ginn met with the Reunion sales team and announced several new phases of amenities to come to Reunion along with the immediate expansion of their own multi-acre Water Park. Ginn will also make all Reunion owners / members part of Ginn Clubs, by introducing The One Club which will grant reciprocity to Ginn members so that they can access other Ginn communities. This means if you’re a member at Reunion then you’re also a member of several other Ginn Resorts i.e. Bahamas, Hammock Beach (one hour away), Bella Collina (20 minutes way), North Carolina, South Carolina, Vermont, St. Thomas, etc. giving you access to several top ranking courses and world class amenities.

Along with this news, Bobby Ginn also announced the best deal since 2003 to become a part of the Reunion family. They have a limited number of brand-new, three bedroom, three bath Villas located in the heart of the community (next to the future Reunion Square and current Water Park). Located on the Watson Signature golf course they are being offered for an average price of $375k! They are also offering a furniture package for $25k that will completely furnished the condo (including technology) to be “rental ready” per Ginn Specs.

These are the best prices we have ever seen at what is undoubtedly one of the premiere resorts in Orlando.

Like many people across the country I got caught up in the euphoric real estate bull market in 2004 and 2005. A friend of mine from Sarasota was handling the sales for Solaire at the Plaza and told me about the project. I grew up in Orlando and thought it would be fun to own a weekend condo only 2 hours away. At the time I thought it might make a good investment as well as something I could enjoy.

We all know what happened to the real estate market from the time I put my deposit down to when the building was completed. I put roughly $13,000 down and another $8,000 for some upgrades to the condo. So, I am in the investment for roughly $21,000. When the condo was complete my wife and I had to decide to close on the unit or just let the developer take our money.

hBy the time the condo was done I was well aware of what was happening in the real estate market. I sell real estate in Sarasota so I keep track of my market as well as Florida and the overall national trends. Several of my friends in Sarasota also bought units in The Solaire. Their feeling was that the property was a great one, at a good price and that the market was stabilizing. They intended to close on their units.

The contract price was $266,000 for a one bedroom/one bathroom on the 23^rd floor looking east. The maintenance fees were in the $400 a month range and I figured property taxes would run $4,000 to $5,000 a year. I also had to furnish the unit which would probably have cost from $5,000 to $10,000. The place wasn’t that large.

When it was all said and done I figure the initial outlay would be another $40,000 since I already had $21,000 on deposit with the developer. I estimated the yearly costs were going to be around $25,000 a year. I could go several great vacations for $25,000 a year.

When I figured the ongoing expenses in conjunction with rapidly falling real estate prices the decision to not close was an easy one. Unlike some of my Sarasota friends, we decided to not buy the condo. I knew what my total loss was by not closing. If I closed my losses would be at the mercy of the real estate market. If the price of the condo dropped by 30% my loss would be much larger than $21,000. In hindsight the decision so far has been a wise one. I noticed that some of the one bedroom/one baths have sold in the $160k - $170k range.

Looking back on it the desire to make money was the main motivation for the purchase. If I wanted to have a fun weekend with my family I would just do it at The J.W. Marriott. It would be far less expensive and with fewer headaches. However, with all of that being said, if I wanted to own a 2^nd home and had a long enough time horizon this appears to be a good time to start looking. The prices have come back down to reality.

Police officers from Winter Park are investigating the death of Steve Walsh, a well-known developer whose company projects include the $250-million Tradition Towers project in downtown Orlando.

Walsh, 61, was found dead on his own property, according to Orlando Police who were called to Walsh’s $1.4-million home on Genius Drive around 1 p.m. today after a business associate alerted police. He visited the house about 1 p.m. after Walsh didn’t show up for work.

It seems that authorities are not yet prepared to say how he died and are refusing to call it either ’suspicious’ or ‘not suspicious’ - which is a little suspicious in itself - especially since crime scene technicians were called to the home to assist - probably because police found the house in disarray and possibly ransacked. A crime scene technician was seen taking what appeared to be a rifle or a shotgun from the house. Neighbors said there had been recent burglaries in the area.

Broad Street Partners - founded in 1994 - specializes in the acquisition, development and investment management of multi-family communities, commercial/mixed-use projects and town center projects throughout the Southeast. Their developers have completed more than 20,000 condominium and rental units since the ’70s, currently valued at $2 billion. Current Orlando condo projects include the Residences at Ravinia in Maitland and Tradition Towers, downtown Orlando which earlier this year received a 14-month extension from the city of Orlando on the deadline to begin construction. Walsh faced opposition in Winter Park to a proposed condo and retail building on New York Avenue in Winter Park. Eventually, the city bought the property and plans were dropped in 2007.

Profile from Orlando Sentinel January 2007: Developer Steve Walsh has rebuilt his career

Sounds like Reunion is getting ready to move the remaining Villas at Reuion Square. These are the condominiums surrounding the waterpark and downtown area that they have been selling at prices ranging from $635,000 to $705,000 with an incentive package. It seems the company is going to eliminate the incentive package and slash the prices on these units instead. It hasn’t been announced yet, but we’re anticipating an announcement to us Thursday evening. I’m hearing $375,000 for an unfurnished unit and $430,000 for a furnished unit. Call us next week for details.

Reunion is a beautiful community just south of Orlando with 3 championship golf courses and it’s own water park. The resort contains condos, townhomes and custom built homes over $2 million.

The headlining article at money.cnn.com yesterday was titled Did the Fed go too far?, asking whether or not the Fed was prudent in hacking our Fed Funds Rate all the way down to 2%. I’ll save you some time and skip to the end of the story: yes. Yes the Fed did go too far. But they ALWAYS go too far. They almost have to.

As much as we like to think of ourselves in this country as a shining beacon of sense and logic, we really are very prone to mob-mentality. When the media gets us all whooped up over an economic slowdown, we start demanding that the government (in this case, those that decide monetary policy) fix everything or else we’ll kick them out and find someone else who will.

It’s a lot like when any of us gets in the shower. We turn the water on and crank it all the way to the “hot” side because we are impatient and we want the hot water now. Of course, when the hot water finally starts to spray out, it’s way too hot and we’ve got to crank the dial further back to the “cold” side until we find a good balance. Well, by dropping the Fed Funds Rate all the way down to 2%, our Federal Reserve has essentially made the monetary “water” too hot. Now, we’re feeling the burn of inflation.

The question we are now faced with is whether or not we should cool things off by raising rates at this week’s Federal Open Market Committee meeting to battle inflation or leave them alone to help prop up our sputtering economy.

My opinion: if the Federal Reserve opts to raise rates, they are living in a delusional state that I can’t even conceive of. Here’s my three reasons.

Number one: Guiding our economy via monetary policy (the toggling of key interest rates and money liquidity) is like trying to steer a naval aircraft carrier. You can’t just turn the wheel and expect imme­diate results from a behemoth economy like ours. So, we need to give the rate cuts some time to mend our weakening housing sector and rising unemployment. Continue Reading »

Sunday, June 29th: Harbor Vista lake front condos in Leesburg (just north west of Orlando) will host an absolute auction (no minimum bid). This property has been listed for $289k and up. Every unit comes with a deeded, covered boat slip on the Harris Chain of Lakes. The developer looks likely to move at least 10 units. Every condo comes with upgrades of granite stainless and tile. Every unit has a gorgeous view of Lake Harris.

You must register in advance to attend. Contact Condo Metropolis ASAP on 407-290-3408 or email Info@CondoMetropolis.com for more info.

As most of you know, I’m not a rose-colored-glasses-Realtor, more of a tell-it-like-it-is-Realtor, and that makes some call me a “pessimist” - so here’s some good optimistic news - and big yellow, non-pessimistic, crack-smoking smiley face to boot.

It’s claimed that the single most accurate forecast tool for housing activity is the “Pending Home Sale Index” compiled by the National Association of Realtors (NAR). It’s based on contracts signed - but not yet closed from around the U.S. and for some time now, the index has been either negative or flat. But the latest index, released this last Monday, was a surprise.

Instead of falling again (as predicted by Wall Street analysts) it rose by 6.3 % on sales contracts signed during April. Some of these contracts may have been buyers snapping up foreclosed properties, but there appear to be signs that buyers are slowly coming back to actually take part in our Buyer’s Market.

There’s more: The Mortgage Bankers Association of America reports that in its national survey last week, applications for new, conventional loans to buy houses jumped by eleven percent - and applications for FHA insured mortgages were up by seventeen percent.

Perhaps this is because in many major markets, price adjustments during the past two years have been significant, with prices down by 20 to 25 percent - especially in parts of California, Florida, Arizona, and Nevada.

Perhaps we’re close to that “tipping point”, where serious buyers recognize the opportunities, and start flowing back into the market. Add in low interest rates, which are still hovering close to 6 percent for 30 year loans and five and a half percent for 15 year, and you can make a pretty strong, objective case that the home price-mortgage rate equation is more favorable to buyers right now than it’s been any time in the last six or seven years.

And that’s about as optimistic as I can get right now. Not too shabby.

According to a recent (Star Tower) press release, their half-acre rooftop garden on Osceola St. in downtown Orlando is fast becoming the new “in” venue in downtown Orlando.

Albert Kodsi, president of Royal Palm who along with Historic Creations of Orlando developed the Star Tower condo, said recent rooftop events have included political rallies, charitable fundraisers and a recent Downtown Orlando Partnership event.

“We are hosting events three and four nights a week on the rooftop,” said Kodsi. “It’s really the only place downtown where you can view all of Orlando.”

A fundraiser for Charlie Stuart, running for congress, was held June 3 at Star Tower with former Governor and US Senator Bob Graham in attendance as guest speaker.

Star Tower an 18-story Star Tower luxury condominium opened in 2007. One or two units are still available. Contact Condo Metropolis for more details.